Trade
and the Use of Renewable and Nonrenewable Resources
(revision
two)
Incredible amounts of mass are
shifted or traded around the world each year, backed up by over three and a
half trillion dollars. Whether it be
manufactured products (clothing, shoes, etc.), renewable products (such as food
and timber), or nonrenewable goods (such as oil) the fact is that as a global
community, the greater portion of what we consume is nonrenewable, and often
gets used up by people and production processes far from their point of
origin. The scale on which human
activity is shaping the earth is insurmountable—or is it? Is it really a problem? If so, how big, and on what scale?
Environmental concern has come about
fairly recently, in the grand scheme of things. In 1972, the Club of Rome published a report entitled The
Limits to Growth—a path-breaking piece due to its novelty at the time. This to, came as its shortfall, as it
contained a number of methodological limitations, most notably of which was its
tendency to extrapolate current trends without taking into account the effects
of price changes on patterns of consumption.
Given Present resource consumption rates and the projected
increase in these rates, the great majority of the currently important
nonrenewable resources will be extremely costly one hundred years from now.
Inflation-adjusted arguments soon
followed, correcting for the steady increase in the price of any good on a
given market over time. Some then took
the stance that resource prices would drop over time, less economists. The then displayed a common tendency for
economists—they contradict themselves; meeting reviews of ultimate natural
resource depletion with skepticism, citing economic theory. If prices get out of hand, what is more
likely to happen is economic substitution: resource A (Twinkies) is so depleted
or so scarce that its price has skyrocketed, and some users of resource A
(Twinkies) may find it economically attractive to substitute resource A
(Twinkies) with a resource B (Zingers), and so on and so forth. This does, however, necessitate a great deal
of technological optimism, on the presumption that as the price of any one resource
rises there will be alternative resources available that are
close technological substitutes for it.
Still, the some may argue that such
resources are, indeed in fixed and finite supply on the planed Earth—yes, this
is indeed a geological fact, all be it a closed, narrow minded one. Looking ‘outside the box’ will surely yield
the means for eternal human expansion; with the exception of raining meteorite
debris from outer space, we have for the time being only what is at hand—this
large spherical object we lovingly call earth.
Some people have been excessively optimistic
about the resources we have at hand.
Ronald Bailey:
“There is no permanent resource
shortages—future food supplies are ample, world population will level off
before overcrowding becomes a problem and pollution can be controlled at modest
cost.”
Others with less optimistic views about
long-term shortages of natural resources are quick to shake a finger at this,
insisting that the impact of humanity on the resource base is
approaching. Herman Daly
insists that we are now living in a full world, quite unlike the empty
world of the past in which natural resources were considered ‘free goods.’ Daly urges economists and many others that
they have overlooked the paired relationship between Human capital and Natural
capital—productivity of Human capital depends on the presence of Natural
capital.
If we are to truly correct the economists’
graphs/calculations in the name of righting the exuberant use of nonrenewable
natural resources, it is clear that it is necessary to end the subsidization of
the production and consumption of them:
Indirect tax subsidies are given to oil companies for depletion
allowances and lower prices for consumers in certain parts of the world
(i.e.—North America). Dairy production
moved to semi-arid regions in search of dirt-cheap water, subsidized by the
government.
Why must we make such unsustainable acts of
trauma on the environment so attractive to the consumer? It is truly foolish to do so; the practice
of making eye-catching, unsound acts such as these is no more or less
attractive than shooting ourselves in the foot. Take the Colorado River for example—with the exception of years
of abnormally high precipitation, it is simply used up; it has met its demise
long before it spills into the sea.
In other regions of the world, irrigation
projects are depleting irreplenishable aquifers: the water table in the
Apunjas in India fell almost a meter during the 1980’s—a result of government
subsidies that had reduced the cost of irrigation to the farmer.
The trouble comes when both irrigation and
logging become important to the economic development of the third world, yet
projects involving the subsidization of natural resources are almost guaranteed
to become counterproductive and shortsighted.
Third world or not, nonrenewable resource subsidization gives both
producers and consumers false signals, implying that resources are plentiful,
and cost less than is both economically and morally/ethically true.
Now what of renewable resources? One of the few commodities that have seen a
price increase since The Limits of Growth was published in 1972 is
timber. Consumer demand presents a
serious environmental threat to the sustainability of forests in many parts of
the world. Most of the damage is done
in the developing world, primarily in tropical and subtropical forests. It seems as though poor public policy and
venial private interests are to blame in the world’s current irresponsible and
unsustainable use of its forests, but the most powerful answer is often
overlooked by environmentalists and may be closer to home than many would
think.
In parts of the world where forests are most
severely threatened and abused—Asia, South America, and Africa—most of
harvested wood becomes fuel, usually for domestic use. About half of the earth’s population use
wood, charcoal, or biomass substitute to cook all or some of their meals. Traditional stoves are efficiency hogs,
burning through six or seven times more fuel than modern stoves using
commercial fuels (natural gas, electricity, etc.). Not only do modern stoves add a world of convenience to our
lives, but they also reduce the amount of indoor smoke.
The two most fundamental charges against
trade are, in effect, charges against economic growth: that leadds to the
depletion of the earth’s storehouse of resources and simultaneously overwhelms
the earth’s capacity to absorb wastes.
In an economy based primarily on markets, the individual decisions of a
multitude of economic factors, particularily the highly influential decidions
of the most powerful consumers, Americans, will tend to ignore the long-term
environmental costs of their actions.
Only a community decision through governmentally imposed actions can
channel those forces toward less environmentally destructive outcomes. Ultimately, of course, international
agreements on pollution standards and other environmental concerns represent
the best hope for an ecologically responsible economy worldwide.
